ATRA: NY Assembly’s Anti-Arbitration Bills ‘Driven by Trial Lawyers and Lopsided Media Coverage’

Cites Study Showing Consumers More Likely to Prevail in Arbitration than in Court

The American Tort Reform Association today criticized elements of the New York State Assembly for pursuing legislation that, at the behest of the politically powerful plaintiffs’ bar, would make fair, quick and relatively inexpensive dispute arbitration more costly and less accessible for consumers and businesses, contrary to federal law.

“The anti-arbitration hearing to be jointly conducted in Manhattan today by the Assembly’s consumer and judiciary committees promises to offer little more than some election year political ax-grinding driven by New York’s influential trial lawyers and a lopsided series in the New York Times,” observed ATRA president Tiger Joyce, referring to both the Committee on Consumer Affairs and Protection and the Committee on Judiciary as they consider two bills, A.B. 108 and A.B. 8191, which would heap huge data collection and reporting costs, along with other regulatory burdens and outright prohibitions on arbitration service providers.

In a letter sent yesterday to the respective chairs of the two committees, Joyce made clear that arbitration can be a quicker, more efficient and less costly alternative to drawn out lawsuits that often benefit plaintiffs’ lawyers far more than their consumer clients.  The letter also cites a study of consumer arbitration by the Searle Civil Justice Institute at Northwestern University School of Law which shows that consumers prevail more often in arbitration than in court.

“Both consumers and business owners in New York should be troubled by the apparently blinding desire of many in the Assembly to curry favor with the plaintiffs’ lawyers who make generous campaign contributions,” Joyce suggested.  “After all, surely these state lawmakers know that the Federal Arbitration Act, on the books since 1925, and a growing body of federal case law largely preempt state laws seeking to prohibit or regulate pre-dispute arbitration agreements.    

“Even California Governor Jerry Brown saw fit to veto similar legislation last October, citing among other things the likelihood of the bill being struck down by federal courts.  So Governor Andrew Cuomo would presumably be wise enough to do the same if cooler heads in New York’s Senate don’t prevail sooner in stopping these Assembly bills before they can do real harm.

“Meanwhile, New York voters should understand that limits on arbitration mean more lawsuits, and more lawsuits mean more influence for wealthy plaintiffs’ lawyers, the likes of whom did so much to elevate corruption-convict Sheldon Silver to the pinnacle of political power in Albany,” Joyce concluded.